- The board approved 248 million restricted share units (RSUs) for Li under the company’s new 2026 Share Incentive Plan, potentially worth about $1.17 billion.
- Some tranches depend on profitability targets, including annual net income goals ranging from $1.5 billion to $6 billion.
- The company’s market value was about $9.5 billion at the time of the filing, meaning the first target alone would require the stock to more than triple.
U.S.-listed shares of Nio Inc. (NIO) fell over 3% in premarket trading on Wednesday after the EV maker unveiled a large performance-based stock award for founder William Li, echoing the milestone-driven pay plans used by Tesla and Rivian to tie CEO compensation to ambitious growth targets.
Nio’s U.S.-listed shares gained for the third straight session on Tuesday, jumping over 15% to close at $5.7, and marking the stock’s biggest rally in a year.
Nio Grants CEO $1B Performance-Based Stock Package
Nio said in a regulatory filing that its board approved a grant of 248 million restricted share units (RSUs) to CEO William Li on March 6 under the company’s newly adopted 2026 Share Incentive Plan.
At the company’s reference share price of $4.72, the award would be worth about $1.17 billion if all the performance targets are met. The package is divided into 10 equal tranches of about 24.8 million units each, with vesting tied to both valuation and profitability goals.
Five tranches depend on Nio reaching market capitalization milestones of $30 billion, $50 billion, $80 billion, $100 billion, and $120 billion. The company’s market value was about $9.5 billion at the time of the filing, meaning the first target alone would require the stock to more than triple.
The remaining tranches are tied to annual net profit targets of $1.5 billion, $2.5 billion, $4 billion, $5 billion and $6 billion, based on its results. Nio reported a GAAP net loss of 14.9 billion yuan ($2.1 billion) for 2025, meaning it would need to return to sustained profitability before those awards can vest. The RSUs carry no value unless the performance conditions are met, and the awards have a maximum term of 12 years.
Tesla, Rivian Set The Template For Mega Pay Plans
Nio’s plan reflects a broader trend in the EV sector of tying executive compensation to ambitious long-term growth targets. The structure is similar to the milestone-based compensation plan introduced for Tesla CEO Elon Musk, in which payouts depend on significant increases in market capitalization and operational achievements. Tesla’s framework links Musk’s potential awards to valuation targets starting at $2 trillion and rising to $8.5 trillion, as well as operational goals such as vehicle deliveries, robotaxi deployments, Full Self-Driving subscriptions, and Optimus robot production.
A comparable model has also been adopted by Rivian Automotive. The EV startup granted CEO R.J. Scaringe a compensation package potentially worth up to $4.6 billion, with stock options vesting if the company reaches share price targets ranging from $40 to $140, as well as operating income and cash flow milestones.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment for Nio was ‘extremely bullish’ amid ‘extremely high’ message volume, while sentiment for Tesla and Rivian was ‘bullish’ with ‘high’ message volume.
So far this year, Nio shares are up about 12%, while Tesla and Rivian are down roughly 11% and 16%, respectively.
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